During Rheumatoid Arthritis (RA), increased immune cell activation leads to focal bone erosion as well as systemic bone loss, both mediated by osteoclasts (OCs). Dendritic cells (DCs) are critical components of the inflammatory response associated with RA as they are responsible for the activation of T lymphocytes, due to abnormal presentation of self-antigens. Neutrophils can further enhance the inflammatory condition by recruiting more DCs and contribute to local bone erosion by actively secreting inflammatory and pro-osteoclastogenic cytokines. Unfortunately, traditional pharmacotherapy to block the activity of inflammatory cytokines can be inadequate in controlling symptoms and disease progression. Our overall goal is to identify signaling molecules that are critical to modulate the inflammatory and osteolytic components of RA and that may lay the groundwork for novel and more effective therapeutic approaches. We have previously found that PLC?2 is a critical modulator of bone homeostasis and inflammatory responses associated with RA. However, PLC?2 shares high homology with the more ubiquitously expressed PLC?1, thus rendering its specific targeting difficult. Diacylglycerol (DAG) is a downstream product of PLC?2 catalytic activity and data from our group and others indicate that it mediates PLC?2 function in OCs and immune cells. In order to study the role of DAG, we now turned our attention to DGK?, an enzyme that decreases cellular levels of DAG by converting it to phosphatidic acid (PA). Thus, DGK?-deficiency causes accumulation of DAG. Our preliminary data indicate that DGK? is highly expressed in OCs, neutrophils and DCs. We also found that mice lacking DGK? have a substantial osteoporotic phenotype, characterized by reduced trabecular number and thickness and enhanced OC formation and function. Thus, our data indicate that DGK? is a negative modulator of osteoclast activation. Based on this information, our central hypothesis is that DGK?, via modulation of DAG, is a common regulator of bone and immune cells downstream of PLC?2. Thus, we propose to: Specific Aim 1: Investigate the mechanism by which DGK? modulates osteoclast formation and bone resorption in vitro and in vivo. Specific Aim 2: Examine the role of DGK? in development and resolution of serum induced arthritis and its effect on neutrophil activation. Specific Aim 3: Determine the role of DGK? in antigen-induced arthritis and its effect in DC- mediated T cell activation. The goal of this application is to demonstrate the importance of DGK? in the activation and functionality of OCs, neutrophils and DCs as a way to target both the osteolytic and inflammatory components of RA. This novel approach might lay the basis for new therapeutic interventions for RA.